China, Japan, South Korea and Taiwan subsidize capital-intensive industry, with the result that virtually all of the high-tech products invented in America are now manufactured in Asia. Liquid-crystal displays, light-emitting diodes, semiconductor lasers and solid-state sensors are produced almost exclusively in Asia. America’s share of semiconductor manufacturing fell from 25% in 2011, to less than 10% in 2018. Silicon is to the weapons of the 21st century what steel was to the 19th century. A country that cannot produce its own integrated circuits cannot defend itself.
China is outspending the US in quantum computing, including $11 billion to build a single research facility in Hefei. By contrast, the US allocated $1.2 billion for quantum computing over the next five years. Overall, federal development funding in the US has fallen from 0.78% of GDP in 1988 to 0.39% in 2016…
China’s investment in education parallels its investment in high-tech industry. Today China graduates four times as many STEM (science, technology, engineering and mathematics) bachelor’s degrees as the US, and twice as many doctoral degrees, and China continues to gain. A third of Chinese students major in engineering, vs 7% in the US. Eighty percent of US doctoral candidates in computer science and electrical engineering are foreign students, of whom Chinese are the largest contingent. Most return to China. The best US universities have trained top-level faculty for Chinese universities. American STEM graduate programs reported a sharp fall in foreign applications starting in 2017, partly because Chinese students no longer have to come to the US for world-class education.
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